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Thursday, July 21, 2016
Connor Campbell - Market Analyst at Spreadex

Stock of the day 21/07/2016 – Twitter Inc

The company kicked off the New Year in the same way as it ended the old one: with a sharp decline. From an opening price of $22.40 Twitter had fallen all the way to an intraday low of $12.85 by the middle of February, an all-time nadir for the stock. A recovery in the latter half of February then saw the stock trading between $16 and $18 for March and most of April, before earnings-related woes left it hovering just above $14 for most of May. Since then Twitter has, like many US stocks, been on a near-uninterrupted rise, climbing back to a current trading price, and 4 and a half month high, of $18.60 (, 21/07/2016).

Twitter Inc Chart July 2016 Spreadex Financial Spread Betting

Unsurprisingly Twitter’s subdued stock price has been due to the persistently disappointing nature of its quarterly releases. While it beat Q4 expectations with earnings per share of 16 cents alongside $710 million in revenue back in February, news that monthly active users had fallen from 307 million to 305 million quarter-on-quarter helped send the stock to its aforementioned all-time low.

Things were hardly any better at the end of April, with its first quarter report causing a near 21% fall across 6 straight trading sessions as it beat EPS and monthly active user growth estimates but missed Q2 guidance projections. Twitter stated that it expects revenue between $590 million and $610 million in the second quarter, far lower than the $678 million forecast.

In terms of Twitter’s Q2 performance analysts are expecting the company to post revenue of $608 million, a 21% rise year-on-year alongside, more importantly, a 1% rise in monthly active users to 308 million (lower than the 310 million users seen in Q1).

Twitter Inc has a consensus rating of ‘Hold’ with an average target price of $20.68.

Recent Posts:
Morning Market Comment 21/07/2016
Evening Market Comment 20/07/2016
Afternoon Market Comment 20/07/2016
Stock of the day 20/07/2016 - PayPal Holdings Inc
Morning Market Comment 20/07/2016


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